Psychic accepts £125,000 in settlement from the Daily Mail after newspaper suggested she had scammed audience

Sally Morgan accepts libel damages from Associated Newspapers, who have apologised and agreed to pay legal costs

The publisher of a national newspaper has agreed to pay “substantial” damages to a psychic after an article suggested she had “perpetrated a scam” on a theatre audience, a High Court judge was told today.

Sally Morgan has accepted damages of £125,000 from the publisher of the Daily Mail, a statement on her website announced.

Associated Newspapers have apologised to Mrs Morgan, and also agreed to pay her legal costs, a High Court heard.

At the hearing in London, Mr Justice Tugendhat was told that Mrs Morgan was a psychic who had become well-known through appearances on television and in the theatre.

The article published by the Daily Mail claimed that Mrs Morgan was wearing an earpiece during a theatre performance in Dublin, 2011, in order to receive information from the audience and relay it on stage as messages from the spiritual world.

Mrs Morgan sued for libel after the article was published in September 2011.

A statement released on her website said: “Sally Morgan is overjoyed to have won her libel action against the Daily Mail and to have restored her reputation and professional integrity.

“After an 18 month investigation into the work that Sally does, the newspaper was forced to make a full apology to Sally and pay her £125,000 in damages; one of the most substantial libel payments in recent history.”

In the statement, Mrs Morgan is quoted as saying: “Almost two years ago an accusation was made against me that questioned my professional integrity and suggested that I had cheated my fans, who I hold very dear.

She continued: “I bought this libel action against The Daily Mail not to be a spokesperson for mediums and mediumship, nor for financial gain, but for the simple reason of principle. I have done nothing wrong and deserve to have that acknowledged. I have never cheated.

Solicitor for the Daily Mail, Brid Jordan, said that the paper “withdraws the suggestion that Mrs Morgan used a secret earpiece at her Dublin show in September 2011 to receive messages from off-stage, thereby cheating her audience, which it accepts is untrue. It apologises unreservedly to Mrs Morgan for publishing the allegation,” the BBC reported.

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